Osborne under pressure on welfare cuts

THE head of a respected economic thinktank has urged the Chancellor to give more detail on how he proposes to use further welfare budget cuts to balance the country’s books.

Paul Johnson, director of the Institute for Fiscal Studies, said clarity was needed to give credibility to George Osborne’s argument that cuts to other areas of public spending after the election will not have to be as severe as some forecasts suggest.

Analysis suggests the cuts in the early years of the next parliament would be twice the size of any so far achieved by the coalition.

But the Chancellor claims this does not take account of £12 billion of welfare cuts and £5 billion in anti-tax avoidance measures he is planning.

In a post-Budget briefing, Mr Johnson said: “The Chancellor argues that because he is committed to £12 billion of welfare cuts and £5 billion of anti-tax avoidance measures, the required cuts to public service spending are much more modest.

“But if he really wants us to believe that, he needs to be more explicit about how he actually thinks he can cut welfare spending and raise substantial additional sums from clamping down on tax avoidance.”

Mr Johnson said it was two years since Mr Osborne had first announced £12 billion would be removed from the welfare budget.

“Since then the main announcement has been the plan not to cut anything from the main pensioner benefits.

“We have been told about no more than £2 billion of the planned cuts to working-age benefits.

“And remember, apparently the ‘plan’ is to have those £12 billion in cuts in place by 2017/18. It is time we knew more about what they might actually involve.”